Visa Europe, a London-based network owned by banks, has a
put option giving it the right to require Foster City,
California-based Visa to purchase its shares.

“Our longstanding view on the put being exercised is
positive, as we believe a consolidated global network is
stronger than a split network,” Tien-tsin Huang, a JPMorgan
analyst who has an overweight rating on Visa shares, said in a
note to clients.

Lenders that own Visa Europe are considering requiring Visa
to make the purchase, the Wall Street Journal reported
yesterday. Visa Chief Executive Officer Charles Scharf is vying
with competitors MasterCard Inc. (MA) and China UnionPay for a share
of the payment-processing market amid a global shift from cash
to plastic.

Visa Europe split from Visa prior to its initial public
offering in 2008. While purchasing the company could introduce
new risks tied to European Union regulations, it would add about
$1.2 billion to Visa’s annual revenue, Huang wrote.

Visa gained 1 percent to $1.58 at 10:12 a.m. in New York.
The shares are up 4 percent this year.

The deal could cost Visa between $3 billion and $11
billion, according to the Wall Street Journal, which attributed
the information to people familiar with the matter and analysts’
projections. Huang said the deal might cost more than $4.6
billion.

“We have a strong and productive relationship with Visa
Europe,” Will Valentine, a Visa spokesman, said in a phone
interview. He declined to comment further.